Private-sector pension plans et al.

The Act to amend the Supplemental Pension Plans Act mainly with respect to the funding of defined benefit pension plans  (2015, chapter 29) has effect as of 1 January 2016. It amends the Supplemental Pension Plans Act (R.S.Q., chapter R-15.1).

Affected plans

The Act to amend the Supplemental Pension Plans Act mainly with respect to the funding of defined benefit pension plans introduced funding measures effective as at 1 January 2016 for defined benefit plans (with the exception of pension plans of the municipal and university sectors and those covered by a special regulation). In addition to other pension plans, the new measures affect most plans in the private sector.

The Act also introduced other measures that came into effect on 1 January 2016. Although some of the measures affect pension plans of all types, others only affect plans with a defined benefit component or a defined contribution component.

Additional pension benefit and partial payments

The Act to amend the Supplemental Pension Plans Act mainly with respect to the funding of defined benefit pension planshas not abolished the additional pension benefit for private-sector pension plans in particular, unlike the Act to foster the financial health and sustainability of municipal defined benefit plans (CQLR, chapter S-2.1.1), which abolished the additional pension benefit for plans in the municipal sector (French only).

The Act to amend the Supplemental Pension Plans Act mainly with respect to the funding of defined benefit pension plans does not automatically abolish the additional pension benefit, but the repeal of section 60.1 of the Supplemental Pension Plans Act provides for the removal of that type of benefit. Therefore, since 1 January 2016, pension plans are no longer required to offer it. However, the provision of a plan text that provides for the payment of an additional benefit is now more advantageous for members, and takes precedence over the Supplemental Pension Plans Act. Therefore, members are still entitled to the benefit, unless their pension plan has been amended. A provisional measure related to such an amendment is provided for under section 288.4 of the Supplemental Pension Plans Act .

Similarly, members and beneficiaries whose benefits have only been partially paid because their retirement plan was insolvent continue to be entitled to the balance of their benefits under all circumstances, if the provisions of the plan so provide.

Information on the amendments to the Supplemental Pension Plans Act that came into effect on 1 January 2016.

Newsletter number 31: Amendments to the Supplemental Pension Plans Act effective 1 January 2016  provides plan administrators with information on the measures that came into effect on 1 January 2016 and any effects that the measures could have on plan provisions.

To complement 2 provisions of the Supplemental Pension Plans Act that came into effect on 1 January 2016, the Regulation to amend the Regulation respecting supplemental pension plans published in the Gazette officielle du Québec  on 13 July 2016 provides:

• the scale that must be used to determine the target level of the stabilization provision for a pension plan
• the information that the plan administrator must submit to Retraite Québec to inform it of the plan's financial situation at the end of a fiscal year of a pension plan for which no actuarial valuation is required.

Actuarial valuations carried out after 30 December 2015

Actuarial valuations carried out after 30 December 2015 on the affected plans must provide for the funding of a stabilization provision. They are no longer required to include a margin for adverse deviations in establishing the interest rate assumption on a funding basis.

For further information on the funding rules in effect since 1 January 2016, please refer to the Supplemental Pension Plans Act.